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Brady Hedges on Finishing International Overhaul This Year

For over 50 years, Bloomberg Tax’s renowned flagship daily news service, Daily Tax Report® has helped leading practitioners and policymakers stay on the cutting edge of taxation and...

By Casey Wooten

Jan. 14 — Work on an
international tax code overhaul will begin this year, but whether
Congress can pass a bill before 2017 remains unclear, House Ways
and Means Chairman Kevin Brady (R-Texas) said.

“There's no guarantee an international tax proposal
can or will make it to the president's desk, but it's very
important that we advance it as far as we can in this year,” Brady
told reporters during a Republican legislative retreat Jan.
14.

Republicans met at the Baltimore gathering to work
out a legislative plan for the new year, where Brady said they laid
the foundation for a “pro growth” legislative agenda in 2016 that
includes an international overhaul bill, hearings on reworking
other parts of the code and crafting a replacement to the
Affordable Care Act.

“Fixing the tax code unifies us,” Brady said. “That
was very clear from the session today.”

Brady said he and Senate Finance Committee Chairman
Orrin Hatch (R-Utah) intend to begin working together during the
week of Jan. 18 on a proposal, noting an urgency to take action on
corporate inversions, which are deals where U.S. companies take a
foreign address to cut their tax rates, and the need to bring
corporate profits back to the U.S.

To address inversions, “you can wring your hands as
a government, you can try very weak Treasury rules. The one
consistent element has been an uncompetitive tax code that's
driving this, so why don't we go to the root cause?,” Brady
said.

Brady also said he'd like to act to bring home
profits stranded overseas, although he acknowledged the difficulty
of getting anything done this year.

Information on a time line to roll out legislation
has been thin, and Republican leadership gave few guarantees that
they would be able to advance major parts of their agenda. Brady's
comments underscore the difficulty in crafting ambitious tax
legislation during an election season and President Barack Obama's
final year in office, despite the support of newly minted House
Speaker Paul D. Ryan (R-Wis.).

Conservative Pressure

Among those putting pressure on Brady and House
leadership to move tax bills are conservative Republicans, who want
a legislative agenda that includes votes to substantively revamp
the tax code. Rep. Jim Jordan (R-Ohio), chairman of the House
Freedom Caucus, has said that he will press leadership for a vote
on a tax code overhaul soon.

Rep. Jeff Duncan (R-S.C.) told reporters that
conservative Republicans were getting their message out at the
retreat.

“They're being included, they're listened to,
they're having their chance to be heard, and I think that's a
positive,” Duncan said.

But political realities are never far away.

“A lot of people want to do something big and bold,
but you know, trying to find the sweet spot is always a tough
issue,” Rep. Devin Nunes (R-Calif.) told reporters at the
retreat.

Nunes released his own comprehensive tax overhaul
Jan. 13. Brady called the measure a “serious tax reform proposal”
but didn't say when a hearing on the bill would take place (09 DTR
G-4, 1/14/16).

Private Sector Push

Officials at the U.S. Chamber of Commerce have taken
Ryan, Brady and their colleagues at their word on international
taxes.

Continued pressure regarding inversions could force
the matter, said Thomas Donohue, the Chamber's president and chief
executive officer. But Donohue doesn't expect a full overhaul on
taxes this year, he said at a press conference after delivering his
annual speech on the state of U.S. businesses Jan. 14.

While it remains to be seen how far congressional
Republicans progress, some movement is expected, according to R.
Bruce Josten, the Chamber's executive vice president for government
affairs.

“Now whether or not that's going to be kind of a
template for tax reform as opposed to an actual vote, I can't say,”
he said at the news conference. “I think there's going to be a lot
of activity here. Where there's activity in this space, we
obviously will engage it completely from start to finish.”

With assistance from Steven T. Dennis in Baltimore
and Aaron E. Lorenzo in Washington.

To contact the reporter on this story: Casey Wooten
in Baltimore at cwooten@bna.com

To contact the editor responsible for this story:
Brett Ferguson at bferguson@bna.com

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